Landmark Office Investment in the Cathedral City of Peterborough For Sale PRIESTGATE HOUSE, BOURGES BOULEVARD PETERBOROUGH, CAMBRIDGESHIRE
INVESTMENT SUMMARY Purchase price of 4,700,000. Net initial yield of 7.6 %. Freehold. Total net internal area of 2,926 sq m (31,507 sq ft). 54 car parking spaces providing an excellent ratio of 1:54 sq m (1:583 sq ft). Prominent location, situated opposite the town s mainline railway station. Multi-let to an excellent tenant profile; 95 % of the income deriving from blue-chip tenants. Active management opportunities. Residential conversion potential, subject to obtaining the necessary consents. LOCATION Peterborough, in the county of Cambridgeshire, is located midway between the East Anglian coast and the Midlands. It is a historical cathedral city that was designated a New Town in 1968 and is now a principal commercial centre of East Anglia. The city is located approximately 128.0 kilometres (80.0 miles) north of Central London. Neighbouring towns include Cambridge 64.0 kilometres (40.0 miles) to the south-east and Leicester 69.1 kilometres (43.2 miles) to the north-west. Major employers in the city include The Land Registry, EMAP, Thomas Cook, IKEA and BNP Paribas. There are currently a number of proposals at Council and Government level that will improve the future growth of Peterborough.The Government recently announced its commitment to increasing the city s housing stock, developing the city s infrastructure and creating further employment opportunities. In addition, the Government commissioned Lyons report recently recommended the relocation of civil servants from Central London to Peterborough. Peterborough City Council is working towards a Masterplan to regenerate the city centre.within the next 20 years, the Council intends to spend approximately 900m over 219 hectares (540 acres) of the city centre providing approximately 139,350 sq m (1.5 million sq ft) of retail, 9,290 sq m (100,000 sq ft) of offices and 2,000 houses. One of the key sites of the Masterplan already in progress is Morley Fund Partnership and Hammerson Plc s mixed use scheme 0.4 kilometres (0.3 miles) north of New Priestgate House.The proposed plans include a modernisation and a 37,160 sq m (400,000 sq ft) extension of the Queensgate Shopping Centre. DEMOGRAPHICS Peterborough has a population of approximately 158,000 and a population within 32.0 kilometres (20.0 miles) of the city of approximately 540,000. Employment growth in the city increased by 12.3% between 1990 and 2000 compared with a regional percentage of 10.0% and a national rate of 9.0%. Labour costs in Greater Peterborough are highly competitive compared with the national average and especially London and the South East. Peterborough has a Gross Domestic Product of 2.69 billion and has the highest per capita amount in the East of England. Sources: Peterborough City Council, Cambridgeshire County Council Research Group and www.positivelypeterborough.org. COMMUNICATIONS Peterborough benefits from excellent communications; Junction 17 of the A1 (M) is 9.6 kilometres (6.0 miles) to the south west of the city providing a route to London to the south and Newcastle to the north. In addition, the A1 (M) provides access to the M1, M11 and the M25 at Junction 23. The east coast main line rail service links Peterborough to Leeds, Newcastle, Edinburgh and Glasgow. In addition, there are regular direct rail services to London Kings Cross with a journey time of approximately 50 minutes. Stansted and Luton airports are 122.1 kilometres (76.3 miles) and 93.4 kilometres (58.4 miles) respectively south of the city. Both airports provide scheduled domestic and European flights. SITUATION New Priestgate House occupies an entire island site bounded by Bourges Boulevard (A15) and Priestgate. The property is situated in a highly prominent town centre
location in close proximity to both transport and retail amenities; The town s main railway station is diagonally opposite the property approximately 0.3 kilometres (0.2 miles) to the north-west whilst the central bus station is situated 0.4 kilometeres (0.3 miles) directly north of the property. The town s main shopping centre the Queensgate Shopping Centre is approximately 0.2 kilometres (0.1 miles) to the northeast. Bourges Retail Park and the Rivergate Shopping Centre are 0.2 kilometres (0.1 miles) and 0.4 kilometres (0.3 miles) respectively south of the property.the town s prime high street retail location comprising the pedestrianised area around Cathedral Square and Bridge Street is only 0.4 kilometres (0.3 miles) east of the building. The historic Peterborough Cathedral is also a short distance from the property being only 0.4 kilometres (0.3 miles) to the east. DESCRIPTION New Priestgate House was constructed in the late 1980s, of a concrete frame with brick elevations.the building is arranged over ground and three upper floors providing covered car parking at lower ground level.the property is split by a central core into North and South blocks. The office accommodation benefits from perimeter trunking, central-heating, double-glazing and comfort cooling in part.the building is served by two 10 person passenger lifts.there are male and female toilets at each floor. ACCOMMODATION We have been advised that the building provides a total net internal floor area of 2,926 sq m (31,507 sq ft). In addition, there are 54 car parking spaces providing a ratio of 1:54 sq m (1:583 sq ft).the building occupies a total site area of 0.197 hectares (0.486 acres). Please see the tenancy and accommodation schedule. TENANCY The investment is multi-let producing a total income of 375,426 per annum. Please see the tenancy and accommodation schedule. TENANCY AND ACCOMMODATION SCHEDULE Floor Tenant Accommodation Rent PA Review Expiry Unexpired Comments sq ft sq m (per sq ft) North Block Ground Johnston Press 3,894 362 200,000 24/06/06 24/06/11 6.0 Assigned from ( 12.27) Emap Properties Ltd. First 4,331 402 Second 4,331 402 Third 3,739 347 South Block Ground Deloitte & Touche LLP 4,278 397 60,000 29/09/05 28/09/10 5.25 ( 14.02) First British Telecom plc 5,077 472 52,736 12/12/07 11/11/12 7.5 Sublet to Self Trade UK ( 10.38) Services Ltd. Part Second Peter Robert Wharton 1,575 146 17,470 25/03/13 24/03/13 7.75 Assigned from Berry Bros & Philip Bruce Archer ( 11.09) & Legge Ltd. (t/a Urquhart - Dykes & Lord) Part Second Pearl Assurance plc 2,851 265 30,220 13/12/07 13/12/12 7.5 Assigned from ICI Chemicals ( 10.60) & Polymers Ltd who assigned from Imperial Chemical Industries plc. Third Ernst & Young LLP 1,431 133 15,000 29/09/07 28/09/12 7.25 Sub-let to FSC Blanks. ( 10.48) TOTAL 31,507 2,926 375,426 In addition, there are 54 car parking spaces providing a ratio of 1:54 sq m (1:583 sq ft)
COVENANT Covenant Date of Accounts Turnover Pre tax profit Net Assets Johnston Press plc 31.12.2004 519 million 177 million 724 million Deloitte & Touche LLP 31.05.2004 1.3 billion 375 million 249 million British Telecommunications plc 31.04.2004 18.9 billion 2.0 billion 20.4 billion Peter Robert Wharton & Philip Bruce Archer (t/a Urquhart-Dykes & Lords LLP)* Pearl Assurance plc 31.12.2004 466 milion 20 million 1.2 billion Ernst & Young LLP 30.06.2004 828 million 198 million 292 million *Urquhart-Dykes & Lord LLP is one of the largest law firms in the UK specialising in patent and trade mark law.the firm has 9 offices in the UK and 2 in Europe. Further information can be found at their website www.udl.co.uk TENURE Freehold. RESIDENTIAL CONVERSION POTENTIAL We have been advised that there may be potential to extend the third floor of the building and convert the entire South block to residential subject to obtaining the necessary consents. Following preliminary discussions with the local authority s planning department, our client has instructed architects to design a residential scheme.these plans are available on request.we understand that residential values within the town centre are in the region of 2,152 per sq m ( 200 per sq ft). PRICE The freehold interest can be acquired for a price in excess of 4,700,000 reflecting a net initial yield of 7.6% based upon costs of 5.7625%. VALUE ADDED TAX The property has been elected for VAT. It is anticipated that the property will be treated as a transfer of going concern (TOGC). SUBJECT TO CONTRACT AND EXCLUDING VAT INVESTMENT CONSIDERATIONS The property is located in the historic cathedral city of Peterborough. Increased Government and Council funding will dramatically improve the town centre with various mixed use development schemes already underway. The recent Lyons Report recommended the relocation of civil servants from Central London to Peterborough.This will further enhance the office tenant quality in the town centre and stimulate investment in the location. The building occupies a highly prominent position within the town-centre and is situated opposite the mainline railway station. Attractive net initial yield of 7.6%. Multi-let to an excellent tenant profile; 95% of the income is from blue-chip tenants including Johnson Press Plc, Deloitte & Touche LLP, British Telecom Plc and Pearl Assurance Plc. Average weighted un-expired term of 6.5 years. Various asset management initiatives including re-gearing leases and agreeing surrender premiums with tenants not in occupation. Potential to convert and extend the South block to provide residential accommodation subject to obtaining the necessary consents; residential values within the town centre are in the region of 2,152 per sq m ( 200 per sq ft).
M45 M40 M69 M1 COVENTRY Oxford A422 A607 LEICESTER A5 A41 M40 A427 A508 A421 Northampton M1 M40 Milton Keynes A4010 A1 A47 A605 Hemel Hempstead A 1 5 Peterborough A421 A1 Bedford A1 S T ATIO N B O U R G E THORPE ROAD BRIGHT R D Peterborough A14 Stevenage A1(M) M25 Watford A16 A1(M) A47 A141 A10 LONDON PRIESTGATE HOUSE M11 Harlow King s Lynn A1122 A10 Cambridge M11 M25 S STREET W Bus Station B E O U S L E T L I N C O L N Queensgate Centre COWGATE V R O A D NORTH STREET GENEVA ST P PRIESTGATE A G A T R D Bourges Retail Park E A PARK ROAD 1 CAUSEWAY LONG LONG C ST BRIDGE ST CATHEDRAL SQUARE 5 D B R O A Rivergate Centre ST PETERS ROAD G A T E NORTHM CATTLE MARKET RD WHEELYARD I N STER St Peter s Cathedral The Palace BISHOPS NEW ROAD M I D G ATE CITY ROAD ROAD VINEYARD ROAD CONTACT INFORMATION David Baroukh Associates 6 Wimpole Street, London W1G 8AL Telephone: 020 7323 1010 Facsimile: 020 7323 6600 David Baroukh david@dbaprop.co.uk Alex Bard alex@dbaprop.co.uk Alexander Ackerman alexander@dbaprop.co.uk Misrepresentation Clause David Baroukh Associates for themselves and for the Vendors or Lessors of these properties give notice that the particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract. All descriptions, dimensions, references to condition and necessary permissions for use and occupation, and other details are given in good faith and are believed to be correct but any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person in the employment of David Baroukh Associates has any authority to make or give any representation or warranty whatever in relation to these properties. All maps are for identification purposes only and should not be relied upon for accuracy. Subject to Contract and Exclusive of VAT Designed and produced by Oracle Advertising 020 7323 3210 www.oracle-advertising.co.uk June 2005